MARQUEST MONTHLY PAY UPDATE – JUNE 6, 2014

MARQUEST MONTHLY PAY UPDATE – JUNE 6, 2014

Last week the Marquest Monthly Pay Fund (A units) closed at $5.38, up from $5.30 the previous week. The TSX was up 1.6 percent in the same period. Global stocks traded at record levels supported by the ECB’s announcement of measures to counter the risk of deflation and a “goldilocks” US employment report. US non-farm payrolls rose 217,000 in May and the unemployment rate remained steady at 6.3 percent. At the same time, there appears to be no evidence of wage inflation; wages are up only 2.1 percent year over year which has been the average for several years. This makes it likely that Federal Reserve will be able to keep a fairly accommodating stance.

Leading contributors in the portfolio were AutoCanada (up 11.8 percent), TD Bank (up 2.1 percent) and Arc Resources (up 4.6 percent). We wrote about AutoCanada last week and believe that the company has a good story that is beginning to get noticed.

Laggards in the portfolio were Canexus (down 3.9 percent), West Fraser Timber (down 3.9 percent) and Norbord (down 4.6 percent). Lumber prices were down again, hurting forest products stocks such as West Fraser and Norbord. March exports were held back by the port strike in Vancouver. North American lumber shipments decreased 1.9 percent year over year. Canadian shipments were down 4.8 percent year over year.